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This is a detailed blog post  in the context of SAP Business ByDesign capabilities related to active budget control: see main blog post: Active Budget Control in SAP Business ByDesign


This blog post is addressed to implementation teams that introduce this scenario in a new system environment or (a bit more challenging) to introduce in a productive environment with many financial journal entries, not completed purchase orders and alike. I would like to emphasize that active budget control introduction requires a small project and introduction plan. Take this recommended sequence as a guidance and create your own checklist. Just switching on active budget control capabilities without assuring that the described preparations are in place will disrupt your procurement processes or stop other operational postings. It is a good practice to familiarize with the steps in a test environment for a small sample test data set and establish your own procedures.

Guidance to phase in active budget control

You should have read the detailed blog posts related to the topic of active budget control first before you continue.

In this blog post  I would like to suggest a clear sequence of steps how ideally active budget control capabilities can be phased in into an existing and running environment.  If you are in system that is not in productive use yet, the questions how to deal with existing postings and encumbrances are irrelevant. We learned in the detailed blogs posts it is essential to have the budget category properly populated in the areas of planning, budget release, actuals, and encumbrances.

Proposed Introduction Sequence - Active Budget Control

Phase I:  Activate capability in scoping

So here is my recommendation and proposed sequence for phase I:

  1. Activate active budget control (ideally 1 or multiple fiscal periods prior to activation of budget checks. DO NOT SWITCH ON ANY BUDGET CHECK FOR ANY COST CENTER.

  2. Maintain the required budget categories
    including the assignment of G/L Accounts to the budget categories.
    This is required for processes that are NOT triggered or caused  by procurement related processes, too. Examples are: Expenses and reimbursements, cost distributions and allocations, depreciations, etc..

  3. Assignment of budget categories
    (with these settings it is assured that the population of budget category for encumbrances and for the journal entry lines is assured)

    1. to ALL product categories (and optionally to dedicated materials or services)

    2. to ALL relevant P&L Accounts to Budget Categories in the budget category definition

Business Option in Scoping - Active Budget Control

Phase II: “Data Warming:

I called this phase “data warming”. It is primarily about a transition phase to assure that the actuals and encumbrances are populated with budget category. All postings or created encumbrances prior to the budget check activation do not have the budget category populated.

  1. Customers can opt to adjust with journal entry vouchers (JEVs) the budget category population for past data for the cost objects they want to apply budget check.

  2. For the encumbrances customers need to assess how long it will take that ‘old’ encumbrances are turned into actuals. These actuals will also lack the budget category.

With the available reports the situation on actuals and encumbrances should be monitored and assessed whether the data warming is good enough not to hamper budget check in the next step.

  • Cost Centers – Budget Monitoring

  • Projects – Budget Monitoring

Especially the posting with budget category ‘not assigned’ have to be analyzed and assessed.

Example: Check if Budget Category is Filled for Actuals and Encumbrances

Potentially in this phase it is time to also check existing recurring journal entry vouchers and start with the population of the budget category as well.

Phase III: plan / release budget / double-check project cost estimates

The steps in this phase can be tackled in parallel to the data warming phase. In data warming the emphasis is on actuals and encumbrances to assure that the necessary budget categories are populated.

Now it is time to prepare the

  • Financial plan data (default) including the budget category

  • Budget release data (default)

  • Project cost estimates in case you are using direct cost projects (all industries except public sector edition)

Again: Please check with the reports your preparation status from a business perspective.

Phase IV: activate budget check

After all these preparations it is now time to put active budget check into action. To do so,  go to the cost center master data and switch on a tiny switch: ‘Budget Check Enabled’. After having these changes applied do  not forget to activate the applied changes in organizational management.

Cost Center Master Data - Activate Budget Check

After activation of these changes the budget check is in place in the procurement process if this cost centers is used in the account assignment.  The same is true for related cost collector projects and direct cost projects. So customers can decided step by step which areas of their business areas the budget check will be introduced.

In case of emergency: In case unexpected process variations occur in your procurement process that you had not foreseen you can switch off budget check on the affected cost centers temporarily, order, analyze the situation, put corrections adjustments in place and activate again. There is no need to switch off this capability for the entire system.


I hope these proposed sequences for the introduction for cost center budgets and project budgets with budget check capability are helpful. For sure there are other valid approaches – but giving you guidance hopefully shortens the time for your implementation project and helps defining the right approach for your company’s needs.

Leave a comment if you think this has been valuable information. Share your insights if crucial aspects have not been addressed here.

Back to main blog post: Active Budget Control in SAP Business ByDesign